Limit conjoint analysis and Vickrey auction as methods to elicit consumers' willingness‐to‐pay

Abstract

PurposeLimit conjoint analysis (LCA) and Vickrey auctions (VA) are methods for measuring willingness‐to‐pay (WTP) currently under discussion. However, there are hardly any studies comparing the approaches in terms of their applicability and validity. This paper aims to analyze the differences in WTP elicited by the two methods and their validity in high and low involvement situations.Design/methodology/approachData were obtained from 179 online interviews conducted in Germany. Differences in the WTPs elicited were analyzed with a Wilcoxon Signed Ranks Test. For the validation part, a χ2 test of independence was used.FindingsThe results indicate differences depending on the method applied and the involvement situation. Additionally, the study indicates that for low involvement products VA performs better while for high involvement situations the results are not as clear. In terms of validity, both methods do not show satisfactory results.Research limitations/implicationsIn order to generalize the findings further WTP comparisons should be done with other survey objects, samples and measurement approaches. The contribution of this paper is to show that there are significant differences in WTP measurement depending on the method used and the involvement of consumers.Practical implicationsMarketing researchers and practitioners are advised to pay special attention to the choice of method when measuring the WTP for a specific product. VA should be preferred in low involvement situations. LCA should not be used in situations where consumers are not interested in the product.Originality/valueThe study presented is the first paper to tackle the issue of influencing factors of WTP measurement systematically.